Lori Systems, an African on-demand logistics and trucking company that digitizes haulage and offers shippers solutions to manage their cargo and transporters has raised a pre-Series B round in which Google and other existing investors participated. According to sources, the company raised at a slightly higher valuation than its previous $110 million valuation in 2020.
This undisclosed investment is Google’s third from the $50 million Africa Investment Fund, announced by company CEO Sundar Pichai last October, which is aimed at the continent’s early- and growth-stage startups. The fund is part of Google’s five-year plan to invest $1 billion in “tech-led initiatives.” The announcement follows the opening of Google’s first product development center on the African continent in Nairobi.
Google announced its first investment in Ugandan super app SafeBoda in December. During the announcement, Sub-Saharan Africa managing director Nitin Gajria stated that the Africa Investment Fund would not be limited to specific verticals or regions. He said they are concentrating their efforts on investments where they believe Google can add value. And that if founders are creating interesting products that address real-world problems in Africa, that would be a perfect fit for their investment thesis.
The following month, the fund participated in a $20 million Series A extension round led by a16z for South African games publisher and studio Carry1st. When asked about the fund’s investment strategy, given that it has come from three different sectors, a Google spokesperson told TechCrunch that the fund’s most recent investment was in Lori Systems.
According to reports, Africa spends more than $180 billion per year on haulage, and logistics account for more than 70% of a product’s price. In the United States, it is 6%. The impact of logistical operations on products causes various issues for operators, ranging from inconsistent pricing caused by a fragmented supply and demand market to paper documentation and limited or no access to financing.
Companies like Lori solve such problems and reduce costs by connecting shippers to transportation, assisting them in moving cargo, extending working capital facilities, and providing software to manage their operations. Lori stated that it has assisted thousands of shippers and carriers move over $10 billion in cargo.
“At Google, we understand the transformative power digitization can bring to the African continent. There is so much potential in the region, but it’s only through innovation that this can be fully unlocked,” commented Gajria on Google’s participation. “Lori Systems is a great example of how technology can be scalable across Africa, and how, in turn, this can drive meaningful economic development.”
It is unknown how much Google’s Africa Investment Fund invested in this round, as it did in Safeboda and Carry1st. However, it is worth noting that the fund, which, according to a spokesperson, does not intend to lead investments but rather “partner with top investors who have a regional presence and local knowledge,” has primarily participated in extension deals through convertible notes.
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